With the General Election just around the corner the main parties are making pledges around the hot topic of housing. All parties are in agreement that we need more homes.
The Conservatives have pledged to build 200,000 new starter homes, that would be offered with a 20% discount to First Time Buyers under 40 and extend the Help-to-Buy scheme to 2020 to help more people onto the housing ladder. They are also to introduce a new help-to-buy ISA to support people saving for a deposit.
Labour have pledged to build 200,000 new homes by 2020 and create a “Future Homes Fund” to build homes that local people need and make sure that first time buyers are first in line.
The Lib Dems have pledged to build 300,000 new homes plus create a “Rent to Own” programme where young people will be able to buy their own home without needing a deposit. Rent to own will see first time buyers steadily build up a share in their home through monthly payments equivalent to rent, until they own the property outright after 30 years, just like a mortgage.
What all these pledges have in common is, what exactly are they going to do to achieve their goals? Interest rates won’t stay at such low rates forever and when they do begin to rise there will have to be vital financial support available to help drive the housing market.
A general election will always cause uncertainty in the housing market and there have already been reports that this has impacted business; reporting that the market is “subdued” and unlikely to pick up again until after the election.
Election “jitters” could lower the number of property transactions rather than property prices. It will be interesting to see what incentives if any are introduced by the winning party to really kick start the market.
A surge in activity after the election will depend on a number of factors; how quickly the winning party put their pledges into practice, how interest rates are affected and if the banks up their mortgage lending.
Whatever happens it will be an exciting time for us all.
- 23 April 2015